Persons diagnosed with schizophrenia demonstrate deficits in prosody recognition. To examine prosody along the schizophrenia spectrum, antipsychotic-naïve schizotypal personality disorder (SPD) subjects and healthy control subjects were compared. It was hypothesized that SPD subjects would perform more poorly; with cognitive and demographic factors contributing to the poor performance. The superior temporal gyrus (STG) was selected as the region-of-interest (ROI) given its known abnormalities in SPD and its important role in the processing of prosody. METHODS: SPD and healthy comparison (HC) subjects were matched on age, IQ, and parental social-economic status (PSES). Cognitive measures included the Speech Sound Perception Test (SSPT) to examine phonological processing (SPD=68, HC=74) and the Verbal Fluency task to examine executive functioning (SPD=129, HC=138). The main experiment was a novel fMRI task of prosody identification using semantically neutral sentences spoken with emotional prosody (SPD=16, HC=13). Finally, volumetric measurement of the superior temporal sulcus (STS), a key region for processing prosody, and partially overlapping with the STG, was performed (SPD=30, HC=30). RESULTS: Phonological processing and executive functioning were both impaired in SPD subjects compared with HC subjects. Contrary to the prediction, SPD subjects, as a group, were similar to HC subjects in terms of correctly indentifying the emotion conveyed and reaction time. Within the SPD group, prosody identification accuracy was influenced by executive functioning, IQ and perhaps PSES, relationships not found with HC subjects. Phonological perception aided prosody identification in both diagnostic groups. As expected, both groups activated the STG while performing the prosody identification task. However, SPD subjects may have been less "efficient" in their recruitment of STG neurons. Finally, SPD subjects demonstrated a trend toward smaller STS volumes on the left, particularly the lower bank. CONCLUSIONS: These data suggest that subtle differences between SPD and controls in phonological processing, executive functioning, IQ, and possibly PSES, contributed to difficulty in processing prosody for some SPD subjects.